Friday, January 23, 2009

Corporate Handouts

The UNC Center for Competitive Economies reports that North Carolina should end its system of providing tax credits to recruit businesses to the state, according to Forbes:

"The incentives that worked well 10 years ago are not performing as well today and suggests that the portfolio should be reallocated to capture higher returns and changing (to) the types of incentives that we use," center director Brent Lane told the Joint Select Committee on Economic Development Incentives.

If that means ending corporate welfare for select industries with large lobbying budgets, then all is well. Unfortunately, the devil is in the details. The Fayetteville Observer reports that the "incentives" favored by the Center are just a more direct mechanism for funneling money to corporations:

The report said incentives expanded by then-Gov. Mike Easley are more useful. They include paying cash to companies for creating jobs.

Here's an alternative idea: Reduce state spending. End all programs that favor redistribution from one group (or one industry) to another. Reduce taxes across the board to reflect the fact that we no longer have so many welfare programs to administer. That favorable tax climate, and the hardworking population of North Carolina, are the only "incentives" industry should need.

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